Automatic inflating toys and balloons are well known in the art. U.S. Pat. No. 4,898,561 appears to be one of the first toys that utilized chemicals that are kept separate by a membrane inside the toy. Rupturing the membrane caused the chemicals to mix and react to produce a gas inflating the toy. However, this is as far as the prior art provides. There is thus a need to increase the enjoyment of these toys and to provide a safe transport mechanism to ensure the toys do not self-inflate prior to the desired time. The present invention solves this problem by providing an automatic or self-inflating toy placed in a housing, which acts as a protective capsule in transit as well as in retail shelves and which pops apart during the inflating process to reveal the inflatable toy.